Scared and in need of help - mortgage refinance w/ bad credit

[Tulleylea]

Firstly, I want to thank anyone taking the time to read this, and also for any advice given.

I’m very frightened right now. I’ll try to make a long story short! Oh, and I live in Pennsylvania!

My final divorce papers came this week, and so I set about taking my ex-husband’s name off the home and put it in mine only, which was defined in the divorce decree. I called Wells Fargo, the company that has handled my mortgage for the length of owning this home, six years. They said I could not do an ‘Assumption’, because we used my ex’s VA bill to originally purchase the home. Fair enough. They said my only option was to refinance. I voiced my concern regarding my bad credit, but they said they had a department that can work with me.

Wells Fargo called this afternoon and told me ‘there is nothing we can do for you’ and ‘good luck’. I have NEVER missed a mortgage payment to this company in six years. Never once have even been late. I even have myself set up on a payment schedule where they draft an amount of money directly out of my bank account every two weeks, as opposed to paying monthly. This way I thought I would do a little better by getting some extra payments in.

The Wells Fargo representative babbled something about he could only draft for 80% of the home and that since that was only $52,000 his Underwriters would not agree. Please excuse me for living in a crappy little home. But its my crappy little home and I like it. Basically, I got the feeling that they could work with my credit, but didn’t feel me worthy of their time.

I don’t know what to do now. I don’t want anything special, I just want my home in my name.

Also, I really need to move on this because my mother has been getting harassing calls from a company that says that my ex owes them over $10,000 and that they are ‘going to sue him’ and ‘take his house’. The company is calling my mother because at one point my ex listed her as a personal reference.

I am scared to death that they are going to take my home.

I pulled up a copy of my credit report online yesterday and found that my credit score is 614. Not good, I know. But Wells Fargo said I needed to check it because they can’t work with anything below 500. Last time I did the math, 614 is not below 500. But! No more Wells Fargo bashing!

I also found in my credit report that a loan that I co-signed on for my ex (the balance is around $8,500), he has not made a payment on in over 180 days. Lovely.

I have paid $280 on this house every two weeks for over six years. That has to account for something, right?

Oh, I guess I should also state that this is my first and only mortgage, and this house has never before been refinanced.

Can anyone offer any advice, or even a reputable company to contact?

Thank you so very much.What is the name of your state?

[FlyingRon]

Wells Fargo isn't the only game in town. Do you have a relationship with a bank you have an account with. Try them. Try lendingtree.com.

[quincy]

Did your ex-spouse quitclaim the house over to you as a condition of the divorce?

If my understanding is correct (and it may not be), you do not need to refinance the house if you are on the mortgage papers already, nor can the mortgage company refuse to service the loan as it always has. When a divorce occurs and the decree orders one spouse to relinguish all rights in the home to the other spouse, it is not considered a transfer of ownership or an assumption of the mortgage - it simply removes the one spouse from the title to the home. Wells Fargo should just remove your ex-spouse's name from the house papers as ordered by the court.

Of course, if you cannot afford the current monthly payments and are looking to refinance for that reason, then that is a different story. In that case, your income and your credit history will be the determiners on a new mortgage.

Wait for others to post, however, as I may be wrong on this - but I am pretty sure that is how it operates in Michigan.

[burtsbee]

its been my understanding, that WF talks a good game until you actually need them to do something , they have underwriters who knock down everything , no matter how good of a customer you have been with them

as far as the divorce, i agree with the poster above, if you are making payments and continue to make payments on time, you should have no reason to even get involved with WF or their lousy underwriters

[jmm]

Originally Posted by Tulleylea

They said I could not do an ‘Assumption’, because we used my ex’s VA bill to originally purchase the home. Fair enough. They said my only option was to refinance.

I'm not an attorney, but my sister recently went through a divorce where she and her ex-husband had bought a house through a VA loan (he was in the military). As in your case, the Court awarded my sister the house.

I did some research about a month ago, and if Wells Fargo is telling you that you cannot ASSUME the VA loan, then they are either incompetent or are lying to you.

Since you are getting a divorce, you are allowed to assume the loan and it cannot cost you more than $75. This is known as an "unrestricted transfer":

* Loan assumptions or transfers are also allowed regardless of the date of the loan in cases described as “unrestricted transfers.” These include cases where the borrowers get a divorce. Although a release of liability is not mandatory, the parties may wish to obtain a release for legal or credit purposes. VA, not the loan holder, must process the application for release in these cases.

As noted above, instead of contacting Wells Fargo, you need to contact the VA department that serves your area and talk to them. They can mail you paperwork that you need to fill out to have the mortgage transferred into your name only. You will need to have your ex-husband sign a Quit Claim Deed in front of a notary.

My sister just went through this process and it takes about 3 weeks to have the loan 'assumed' by you once you send the paperwork to the VA. And, by the way, they didn't even charge her the maximum $75 fee to do the transfer and assumption into her name (I don't know in what conditions they charge that fee).

Here is the main VA webpage: [url]http://www.va.gov/[/url]

Finally, Pennsylvania is not a community property state. I suspect that once you get him off the mortgage and deed that you'll be in a much safer position from potential liens being placed upon your home for any debts your ex- may default on. At least I would hope so (remember I'm not an attorney).

I think it is very important that you move as quickly as possible and get the mortgage / deed put into your name only -- make sure you get your ex- to sign a Quit Claim Deed ASAP so you have that ready. You can find sample QCD forms on the internet, or maybe go to to the Deeds/Records department at your courthouse and talk to them to see if they have blank forms available, or talk to an attorney (but a QCD is not that difficult to fill out).

Hope this helps and good luck.

[Tulleylea]

May whatever you all believe in bless you. I REALLY appreciate this.

I'm currently looking into everything you all have suggested. I have to wait until Monday morning for some, but I'll post the outcome, so maybe I can help others.

Thank you all.

[Tulleylea]

Originally Posted by jmm

I did some research about a month ago, and if Wells Fargo is telling you that you cannot ASSUME the VA loan, then they are either incompetent or are lying to you.

The more I talk to people, the more I hear that Wells Fargo is 'in trouble' and 'won't deal with you unless you have a credit score of 900 and a home worth over 300k'.

I wonder this - am I better off to fight with Wells Fargo, or say 'screw you' and take my meager amount of money elsewhere?

[quincy]

If you have a good interest rate and good mortgage terms, I personally would stick with Wells Fargo. It is often hard to get a mortgage when you are going through a divorce and, especially with lenders tightening up their lending standards, you may have difficulty finding better or even equal terms. You could certainly shop around for another bank to service a loan on your home, however every time a bank pulls your credit rating it affects your credit score.

Again, wait for others more knowledgeable to post.

And good luck to you.

[jmm]

Originally Posted by Tulleylea

The more I talk to people, the more I hear that Wells Fargo is 'in trouble' and 'won't deal with you unless you have a credit score of 900 and a home worth over 300k'.

I wonder this - am I better off to fight with Wells Fargo, or say 'screw you' and take my meager amount of money elsewhere?

I don't understand your question?

Since you say you have a VA Loan, all you need to do is contact the VA that serves your area to get the necessary paperwork so that you can "assume" the loan (i.e. put it in your name only). You don't go through Wells Fargo to do this.

The mortgage will still be held by Wells Fargo, and you will continue to send your payment to them. But instead of paying $3000 (or whatever) it will cost to refinance, you will not be charged more than $75 to have the VA transfer the loan into your name.

I think it is a simple decision?

At least it was a simple decision for my sister since it would have cost her in excess of $10k to refinance (she had no equity in the house, so would have had to come up with extra money to do the refinance since her loan would have been higher than what the house would have appraised for).

Also I failed to mention that once your ex- signs (and has notarized) the Quit Claim Deed, that you'll need to file that in the Records/Deeds department at your county Courthouse. The VA paperwork will require a file-stamped copy of the QCD, and may require special wording in the QCD. So best to contact the VA for your area to see what they require.

I would not delay at contacting the VA and also getting the Quit Claim Deed done ASAP. Hopefully your ex- will be cooperative, but it took my sister several months and having to threaten to take her ex- back to court (i.e. contempt of court) before he would agree to sign the QCD. It was quite a mess...

Hope this helps.

[nextwife]

Originally Posted by jmm

I'm not an attorney, but my sister recently went through a divorce where she and her ex-husband had bought a house through a VA loan (he was in the military). As in your case, the Court awarded my sister the house.

I did some research about a month ago, and if Wells Fargo is telling you that you cannot ASSUME the VA loan, then they are either incompetent or are lying to you.

Since you are getting a divorce, you are allowed to assume the loan and it cannot cost you more than $75. This is known as an "unrestricted transfer":

* Loan assumptions or transfers are also allowed regardless of the date of the loan in cases described as “unrestricted transfers.” These include cases where the borrowers get a divorce. Although a release of liability is not mandatory, the parties may wish to obtain a release for legal or credit purposes. VA, not the loan holder, must process the application for release in these cases.

As noted above, instead of contacting Wells Fargo, you need to contact the VA department that serves your area and talk to them. They can mail you paperwork that you need to fill out to have the mortgage transferred into your name only. You will need to have your ex-husband sign a Quit Claim Deed in front of a notary.

My sister just went through this process and it takes about 3 weeks to have the loan 'assumed' by you once you send the paperwork to the VA. And, by the way, they didn't even charge her the maximum $75 fee to do the transfer and assumption into her name (I don't know in what conditions they charge that fee).

Here is the main VA webpage: [url]http://www.va.gov/[/url]

Finally, Pennsylvania is not a community property state. I suspect that once you get him off the mortgage and deed that you'll be in a much safer position from potential liens being placed upon your home for any debts your ex- may default on. At least I would hope so (remember I'm not an attorney).

I think it is very important that you move as quickly as possible and get the mortgage / deed put into your name only -- make sure you get your ex- to sign a Quit Claim Deed ASAP so you have that ready. You can find sample QCD forms on the internet, or maybe go to to the Deeds/Records department at your courthouse and talk to them to see if they have blank forms available, or talk to an attorney (but a QCD is not that difficult to fill out).

Hope this helps and good luck.

Likely the divorce agreement requires a Release of Liability as to your husband's name on the mortgage?

There is NO way that it is appropriate to ask him to sign a Quit Claim until you are REMOVING him from the mortgage. It is careless and irresponsible for people to go quit claiming real estate for which they are still legally liable.

See whether you can complete an assumption of the FULL liability on the loan. He needs to be totally removed from the loan and have his eligabliity restored

[url]http://www.veteransresources.org/forums/showthread.php?t=1468[/url]

"Many veterans and their families take advantage of the VA Home Loan Guarantee Program. This program allows veterans to purchase a home with no down payment and a portion of the mortgage is guaranteed by the VA which makes it easier for veterans buy property. However, many veterans at some point in time want to sell their homes and choose to allow the buyer to assume their mortgage. In these cases the veteran should be familiar with the VA Assumption of Mortgage and Release of Liability Form.

When a veteran opts to allow the buyer of their home to assume the current mortgage, the Assumption of Mortgage and Release of Liability Form protects the veteran and restores their entitlement in the VA Home Loan Guarantee Program. If the veteran does not require this form during the assumption of their mortgage then they will not be able to use the VA Home Loan Guarantee Program again until the new owners of the home pay off their assumed mortgage.

The Assumption of Mortgage and Release of Liability Form requires the veteran homeowner to supply the following information:

* The VA Loan Number. If you aren’t sure what your VA Loan Number is you should contact your mortgage company. This is required by the VA so that they know which loan is being assumed.
* The seller’s name, mailing address, social security number, home phone number, work phone number, and the address of the property which has the VA Home Loan Guarantee on it. This is required so that the VA can cross reference and verify information on the guaranteed loan.
* The buyer’s name and address.
* The sale transaction status. This is the stage of the current sale. Is the property sold already with the deed in the new owner’s name? Is the property still in the original veteran’s name and a purchase price is determined for the sale? Is there a contract for the home sale?
* In the case the home is already sold or a purchase price has been agreed upon, what is the amount of the purchase price? The VA needs to make sure that the purchase price is high enough to cover the existing mortgage.
* The name and address of the current mortgage loan lender.
* The balance owed on the mortgage.
* The monthly mortgage payment amount.
* Any other liens that are on the property.

After the veteran has all of this information on the Assumption of Mortgage and Release of Liability Form they can sign the form and send it to the VA. It is important for veterans to remember that the seller must agree to accept all liability for the property in order for the buyer to be released from liability. This means that the buyer should have the Assumption of Mortgage and Release of Liability Form processed by the VA and in place before the final sale of the home. Otherwise the buyer could decide to leave the liability on the seller which would tie up their entitlement in the VA Home Loan Guarantee Program."

[jmm]

Originally Posted by nextwife

Likely the divorce agreement requires a Release of Liability as to your husband's name on the mortgage?

There is NO way that it is appropriate to ask him to sign a Quit Claim until you are REMOVING him from the mortgage. It is careless and irresponsible for people to go quit claiming real estate for which they are still legally liable.

It's clear to me that the OP intends to fully assume the loan, so her ex- will be removed from both the mortgage and deed. He should also be released from liability and have his VA benefits restored.

For her to assume the loan, her ex- must sign over the property via a Quit Claim Deed.

Since there is a concern about her ex- defaulting on debt (and creditors possibly coming after her house) the quicker the OP can get the mortgage and property transferred into her name, the better off she will be. Hopefully her ex- is cooperative.

[nextwife]

Originally Posted by jmm

It's clear to me that the OP intends to fully assume the loan, so her ex- will be removed from both the mortgage and deed. He should also be released from liability and have his VA benefits restored.

For her to assume the loan, her ex- must sign over the property via a Quit Claim Deed.

Since there is a concern about her ex- defaulting on debt (and creditors possibly coming after her house) the quicker the OP can get the mortgage and property transferred into her name, the better off she will be. Hopefully her ex- is cooperative.

He should ONLY do so via an attorney or escrow agent: not in advance. Normally, a refi and QC should be exchanged simultaneously at the closing office. As this is somewhat different, it needs to occur through a third party. Her "intent" is irrelevant. Until the Assumption and Release of Liability is processed and actually approved by the VA, no QC should be done.

[jmm]

Originally Posted by nextwife

He should ONLY do so via an attorney or escrow agent: not in advance. Normally, a refi and QC should be exchanged simultaneously at the closing office. As this is somewhat different, it needs to occur through a third party. Her "intent" is irrelevant. Until the Assumption and Release of Liability is processed and actually approved by the VA, no QC should be done.

I suppose you can give the ex-husband that advice when he posts his question? Also, a release of liability (while nice for him) is not required by the VA in this case (see my original reply).

In the mean time, if the OP can get a QCD signed, notarized, and filed, she is at least moving in the correct direction toward removing his name from the deed and, ultimately, the mortgage. Since the ex- is already 180 days late on one loan, I think the OP needs to move quickly (assuming doing so saves her the potential of creditors placing a lien on her property due to her ex- defaulting on a loan in his name).

[nextwife]

Originally Posted by jmm

Also, a release of liability (while nice for him) is not required by the VA in this case (see my original reply).

At issue is NOT what the VA requires: it is what the DIVORCE Decree requires. That is the controlling document as to what is required.

And she has a right to ask for the deed WHEN she is taking his name off the mortgage. If she didn't want to have this drag much beyond the divorce, she could have had her ducks in a row and started the approval process in advance, subject to completion of the divorce.

I will NOT be a party to recommending that ANYONE deed away an interest in real estate while they still are liable for the loan! There is NO reason he should agree to do this, nor does she have a right to ask him to until she completes HER responsibility. I sure hope you aren't an attorney with that sort of recommendation.

[danno6925]

If Wells Fargo is being difficult with the assumption, maybe you can refinance it in your name only. I use PHH quite often and have always been pleased with the results.

My local Rep's name is Monica.
Her number is 610.637.1155
She is awesome. If she can't help you, she can at least tell you who can.

Good Luck!